In my last post, I gave you a few ways to determine whether your head was in the right place to become an owner-operator; questions to ponder before deciding to make the transition.
To recap, they are as follows:
- Are you ready to operate a trucking business on your own?
- Are you disciplined enough to motivate yourself on a daily basis?
- Are you willing to work hard? Really hard sometimes?
- Do you have a basic working knowledge of the mechanics of the vehicle you'll be driving?
If you've answered those questions and feel confident your head is in the right place, read on. I also mentioned in the last post that becoming an owner-operator requires a certain level of personal responsibility. Part of that responsibility is being prepared for the challenges you will face and being able to determine what your needs are going to be in order to have a fighting chance from the very beginning. The old proverb "failing to plan is planning to fail" rings quite true in this situation.
So, you'll need to think about a few things. How much money will you need to buy a truck? What kind of equipment do you need to work with the company you eventually choose? Do you need your own trailer or can you rent one from the company you lease on to? What kind of freight do you want to haul? What part of the country are you looking to work in (if interested in regional or dedicated routes)? Who is going to dispatch your loads? How will you keep up with all the paperwork? What happens when your truck needs repair? Determine your needs.
Keep in mind that each of the following sections can be expanded exponentially once you start breaking down the items within each category, but I'll just cover the basics. Here are a few of the top considerations:
Find a Company That Meets Your Needs
You'll want to research companies early on in your decision making process. My suggestion is to look into companies who either work exclusively with owner-operators or have a large owner-operator base. The reason I say this is because you do not want to compete with company drivers, you want to be on a level playing field with other owner-operators.
Once you have narrowed down the companies that interest you, contact their recruiting department to find out what the requirements are for signing on as an owner-operator. For example, they may want to know how many years driving experience you have, what your driving record is, if you have over-the-road or just regional experience, what kind of equipment you have operated, what endorsements you hold, etc. Almost all companies will be interested in doing a criminal background check in addition to checking your driving record. Depending on the type of operation they run, they may be less strict in some of these areas, allowing you an opportunity that you might not have elsewhere. When you're confident you've found a good fit, the next thing you need to do is find a truck.
Find a Truck That Meets Your Needs
Now that you know who you'll be leasing to and what kind of freight you'll be hauling, it's time to find a truck. Find out from the company what kind of truck they require: Do you need a new truck or can you lease on with a used truck? How old can a used truck be? (some companies will not allow older than a certain model year) What kind of trailer will you be pulling? Do you need a truck with one, two or three axles? Sleeper or day cab? A powerful engine to make it up big hills or a smaller one to just run around town?
In addition to this information, you'll want to determine what specifications your truck needs; gear ratios of the transmission and differentials, and engine size for instance. Does the truck need to have air ride suspension (spring ride is becoming more rare), cruise control, engine brakes, power take offs (PTO), headache rack, etc.
Another big thing to consider these days are whether the truck you choose will meet the current EPA regulations. Vehicle emission regulations are becoming stricter in many states; for instance, by 2012, California will be prohibiting trucks of a certain age to enter their ports and eventually, their state. You do not want to purchase a truck that does not meet the current requirements, as modifications can be very costly, if even possible. A great source for keeping up on new and changing regulations is the Owner Operator Independent Drivers Association (OOIDA) website. Everything they do is done with the owner-operator in mind.
You also might want to consider how the truck will suit you for the next two to five years, because if you decide to move from your original company to another, will this truck be able to make the move with you?
Find a Support System That Meets Your Needs
By this, I mean anyone who will be helping you with your business. If you use your wife, girlfriend or daughter as a dispatcher, arm them with the information they'll need to help you succeed. If your brother-in-law, best friend or local mechanic is going to be the one working on your truck, determine what their rate will be and where the best place for them to get parts, etc. is. And as for keeping records, the most successful businesses keep impeccable records. Good bookkeeping is a large part of being a successful owner-operator. You have to know what your break-even point is, what to set aside for maintenance and repairs, what you can write off as business expenditures, how to use your per-diem as dictated by the federal IRS regulations, how to pay your taxes, etc. A good accountant for this part of your operation can be invaluable. Invest some time in asking around and doing your research for finding the best. You'll thank me in the long run.